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Market Wrap-Up for Aug.16 (WMT, HD, COH, GLD, PRU, HAL, more)

The big headline from the recent 3-day rally was that the DJIA (Dow Jones Industrial Average) recouped all of the losses resulting from the S&P U.S. debt downgrade. We're certainly happy about that fact, but it would have been good to see much higher volume during the recent rallies. Meanwhile, the market got its first test on a recurrence of bad global economic data today, as Germany reported a weak GDP number. This negative data comes despite the fact that many in the Eurozone see Germany as the nation that could lead a European recovery.

Stocks opened lower today and stayed in the red for the bulk of the day. We did close off the lows of the day and part of the reason could be the positive reaction to earnings results from Home Depot ( HD ) and Wal-Mart Stores ( WMT ). There were numerous laggards holding the averages down, including stocks like Coach ( COH ), Halliburton ( HAL ), and Prudential Financial ( PRU ).

Did anyone notice gold prices ( GLD ) rallying right along side of equities yesterday? Just as the pundits try and make the argument the market will rally only when gold prices fall. As we have been saying, gold prices are simply no longer acting as an inverse to stocks, so be careful if you are using that traditional assumption as part of your investment decision-making.

On a quick note, we removed another dividend name from our "Best Dividend Stocks" List earlier today, so be sure to check out this post detailing the downgrade if you did not read the e-mail alert we sent out earlier.

When I was younger, I'd always hear my older Italian relatives talk about the importance of learning a trade. Back in the 70′s, it wasn't as imperative to go to college (in my Italian circle anyhow), but knowing a trade was considered an absolute necessity. I remember thinking what an old-fashioned approach that was. The world was changing - what did my relatives really know? Who would have thought how accurate they would be four decades later!

According to a survey by the National Employment Law Project, three-quarters of American job growth in 2010 came within industries paying, on average, less than $15 an hour. This means the only way you would be making the big bucks was if you were able to land a great job in a growing industry where you possessed the specific requirements that was needed to excel. Or, the other area was to those willing to take a trade skill learned and build a great business for themselves (plumbers, electricians, etc.). You have middle-income jobs such as nursing that can be fairly reliable as well, without having to work for yourself. The decline of middle-skill jobs suggests a larger pool of workers chasing jobs in retail and the like. Unfortunately with that trend will come pressure of lower wages (which is great for corporations and shareholders as profits rise, but that can't sustain itself if consumer spending hits a speedbump). This is the conundrum I mentioned yesterday where one collecting unemployment may lack the incentive to actually go out and work 40 plus hours a week, only to make slightly more (or actually less in some cases) than not having to make the effort.

Yesterday we had Warren Buffett making his annual "the rich need to pay more taxes" headline op-ed in the New York Times. Whether you agree or disagree with Mr. Buffett, the fact is that the rich do one thing exceptionally well: they can figure out the best possible legal ways to defer paying taxes. That's the reality. You can raise taxes and feel like it's a major win, revenue-wise, but you need to peel back the measures to see what the actual outcome will be. Some will argue that raising taxes will take the incentive away from those who are successful to work hard. I disagree (not that I am a fan of raising taxes to keep an inefficient and failing system in place), simply because when working hard is in your DNA, you don't know how else to function.

I'm sure we will eventually see some decent job creation programs put in place over time, but the reality of the situation will not change all that much. The willingness to hustle and work hard will be a requirement if you want to claim part of the "American Dream." Author and motivational speaker Zig Ziglar had a great line that hits the nail on the head: "It was character that got us out of bed, commitment that moved us into action, and discipline that enabled us to follow through."

Taking charge of your financial future, which combines your efforts in school, career, and investing, is what will define your outlook and level of success in life. Success requires a tremendous amount of effort as well as the willingness to spend time on new and different activities. This efforts should include starting new associations (networking) to see what others are doing to motivate and help themselves both personally and professionally.

I want nothing but investing success for everyone that reads our work and subscribes to our Dividend.com Premium service. There will be ups and downs along the way, but if you stay the course, the goals of building wealth and financial security will be realized. Everyone who reads this newsletter knows I will be persistent when it comes to this message.

Clearly, this is a time for investors to zero in on yield and be very selective. Unlike the usual commentary where things are painted as extremely opportunistic when stock prices fall, I put my guard up and try to narrow my areas of focus so that we are optimizing the "Best Dividend Stocks" List in the event stock prices remain in any prolonged downtrend. Now if the market is making you lose sleep, then you may need to hit the pause button on putting new money into stocks for the time being. Remember, though, your long-term focus should be on buying income-producing assets, so you need to consistently find the best targets no matter what the market environment is.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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